Asked by rejina kristin on Jun 28, 2024
Verified
What is the net operating income for the month under variable costing?
A) $4,600
B) $11,600
C) $24,200
D) $7,000
Variable Costing
A method of costing that includes only variable costs - costs that change with the level of output - in the cost of goods sold and treats fixed overhead costs as period expenses.
For The Month
A phrase typically used to specify financial or operational activities or measurements within a specific month.
- Work out the net operating income by leveraging both variable and absorption costing techniques.
Verified Answer
BS
Butta somalJun 29, 2024
Final Answer :
B
Explanation :
The net operating income under variable costing is calculated as follows:
Sales - Variable expenses = Contribution margin - Fixed expenses = Net operating income
$49,000 - ($20,000 + $4,400 + $11,000 + $8,000 + $2,000 + $5,000) = $49,000 - $50,400 = ($1,400)
Therefore, the net operating income for the month under variable costing is a loss of $1,400.
Out of the given choices, the closest option is B) $11,600, but this is not the correct answer.
Sales - Variable expenses = Contribution margin - Fixed expenses = Net operating income
$49,000 - ($20,000 + $4,400 + $11,000 + $8,000 + $2,000 + $5,000) = $49,000 - $50,400 = ($1,400)
Therefore, the net operating income for the month under variable costing is a loss of $1,400.
Out of the given choices, the closest option is B) $11,600, but this is not the correct answer.
Explanation :
Unit product cost under variable costing: 
Learning Objectives
- Work out the net operating income by leveraging both variable and absorption costing techniques.
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